==========================================START OF PAGE 1====== SECURITIES AND EXCHANGE COMMISSION Washington D.C. Litigation Release No. 14952 / June 19, 1996 Accounting and Auditing Enforcement Release No. 794 / June 19, 1996 SECURITIES AND EXCHANGE COMMISSION v. PIERCE LOWREY, JR. AND RICHARD ESTRIN, 95 Civ. 10242 (SHS) (S.D.N.Y.) The Securities and Exchange Commission announced that on Friday, March 22, 1996, the United States District Court for the Southern District of New York ordered the entry of a final consent judgment of permanent injunction and other equitable relief against Pierce Lowrey, Jr. ("Lowrey"). In a complaint filed on December 5, 1995, the Commission alleged that Lowrey, former chief executive officer and chairman of the board of Information Management Technologies Corp. ("IMTECH") and former president of IMTECH's wholly-owned subsidiary, INSCI Corp. ("INSCI"), and Richard Estrin ("Estrin"), former assistant controller of IMTECH and general business manager of INSCI, fraudulently inflated by material amounts the accounts receivable, sales revenue and net income of IMTECH and INSCI in financial statements for the year ended March 31, 1991 and the quarter ended June 30, 1991. These financial statements were included in the following documents filed with the Commission and disseminated to the public: IMTECH's annual report and its quarterly report; a registration statement filed by IMTECH; and a registration statement filed by INSCI. Lowrey and Estrin allegedly each knowingly or recklessly participated in this fraudulent revenue recognition scheme by recording sales revenue prematurely and by recording revenue from fictitious sales. In addition, Lowrey and Estrin allegedly prepared, or directed others to prepare, fictitious shipping documents and presented these documents to IMTECH's outside auditors as support for the fraudulent accounts receivable and sales revenue recorded. Lowrey consented to the entry of a final judgment permanently enjoining him from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1 and 13b2-2 without admitting or denying the allegations contained in the Commission's complaint. The final judgment also permanently prohibits Lowrey from acting as an officer or director of any issuer that has a class of securities registered with the Commission pursuant to Section 12 of the Exchange Act or that is required to file reports with the Commission pursuant to Section 15(d) of the Exchange Act. Last, the final judgment orders Lowrey to pay a civil penalty of $50,000.00 to the United States Treasury pursuant to Section ==========================================START OF PAGE 2====== 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act. Simultaneous with the filing of the complaint, Estrin consented, without admitting or denying the allegations in the complaint, to the entry of a final judgment permanently enjoining him from violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rules 10b-5 and 13b2-1 thereunder. Estrin also consented to pay a civil penalty of $25,000.00. (See Litigation Release No. 14744 for a further description of the allegations contained in the Commission's complaint and related settlement. See also SEC v. Information Management Technologies Corp. and INSCI Corp, 92 Civ. 7108 (LAP) (S.D.N.Y. 1992), LR 13398.)